European natural gas prices have retreated to €58/MWh, about 9% below the 3½‑year high of €63.7/MWh reached on July 24. Even so, they remain nearly 70% higher than at the same time last year. The market is still underpinned by worries over global LNG supply following the conflict in the Middle East, which has disrupted roughly one-fifth of worldwide LNG flows and hampered Europe’s summer restocking efforts.
EU gas storage is currently just 57% full, the lowest level for this point in the year since 2009 and well below historical norms. The European Commission maintains that ample spare LNG import capacity, together with a storage target of 80%, should be sufficient to cover winter demand. However, Europe is likely to face fierce competition from Asian buyers for available cargoes, keeping upward pressure on prices.
While recent diplomatic signals between the US and Iran have helped ease oil prices and lifted hopes for smoother shipping through the Strait of Hormuz, risks to LNG supply remain elevated.
